March 31st, 2014
Getting car insurance is an important investment for all drivers - not to mention most states mandate them to be covered. While getting an auto insurance policy is the right step to take once you own a vehicle, there are many mistakes drivers make that end up costing them money. Here are some of the most common car insurance mistakes:
Purchasing for the price alone
When you are shopping for a car insurance policy, there are a number of things you should consider beyond how much it will cost you per month. While it is important to budget in these payments, purchasing a policy simply because it has a good price is probably a mistake. When you buy the minimum or cheapest policy, you are most likely missing important parts of coverage that could leave you in the hole if you get into an accident. Be sure to fully review a policy and coverage options before buying. You don't want to find yourself with major coverage gaps when you need help the most.
Not shopping around
Nowadays, there are many different insurance companies that can offer you a great policy that works for your budget as well as how you use your car. Failing to spend the time to search for a policy that completely suits your needs is a big error many vehicle owners make. Instead of going with the first policy that looks good and has a low price, look around at comparable companies and coverage options. For the most part, insurance companies offer similar products and services, but it is crucial that you check out exactly what you are paying for.
Setting the deductible
When you buy an auto insurance policy, you will need to set your deductible. While you might not have a lot of choice in this, setting your deductible too low or too high can mean trouble. If you set it too low, the cost could be made up in other ways, such as your monthly premium. Of course, no one wants a high deductible, but if yours is on the low end, there's a good chance you're shelling out more per month. Consider raising your deductible to a price that is still affordable but will give you a less-expensive monthly premium.
Lying on your application
When you get a quote from an insurance company, it is still dependent on your application. According to Cars.com, more than 30 percent of drivers lie on their insurance applications, despite it being a dangerous action that could lead to more serious consequences later on. Most drivers who lie tend to fudge their driving history to appear as though they are a safer driver. While this might allow you to initially save on your policy, it is relatively easy for companies to check your record and find out if you lied. If this happens, you might see your rate increase substantially or you could be dropped altogether. To avoid this risk, be truthful when applying for an insurance policy.